Most entertainment events require the attendees of those events to purchase a ticket in order to gain entry into the venue at which the event is being held. Conventionally, there are various avenues by which patrons can obtain tickets. One such avenue is to purchase them directly at the site of the venue itself, for example immediately prior to the event, at a pre-established face value.
For popular events, it is desirable to purchase the tickets ahead of time, particularly if the event is likely to be sold out or preferential seating is desired. In such a situation, it may be inconvenient to travel to the venue at such an earlier time. In many cases, therefore, it is possible to obtain tickets through a ticket agent. Typically, such purchases can be made telephonically, via the Internet, or at distributed ticket sales locations that are more convenient to the potential attendees. Generally, the ticket agent has an ongoing relationship with the event venue, by which the venue owner authorizes the ticket agent to sell and distribute paper tickets for the individual events to be held at the venue. In some cases the ticket agents handle all of the tickets for an event, whereas in other cases they may only sell excess tickets that the venue owner is not able to directly sell. In these arrangements, the ticket agent may charge the patron a handling and/or distribution fee.
The third avenue for the patron is to obtain tickets through a third-party broker who purchases a number of tickets, usually for popular events, and resells them to the patrons. Quite often, the tickets are resold at a price which is significantly above the face value of the tickets. Typically, a broker may bundle the ticket with travel arrangements, memorabilia, etc., to justify the increased price of the total package provided to the buyer. All of the profit that results from selling the tickets at a higher value remains with the broker; none of it flows back to the venue owner.
As a fourth mechanism, individuals may buy tickets from the original purchasers, and resell them to others at a significantly higher price. These individuals are sometimes known as “scalpers”. Again, all of the profit from the higher price remains with the scalper, rather than flowing back to the venue owner, promoter or artist. These activities are usually illegal, and can be found almost anywhere.
Currently, prices for event tickets are fixed well prior to the event. Depending upon the popularity of the event, the venue may be full to capacity, empty, or partially filled at the time of the event. For highly popular events in which the venue is filled to capacity, the venue owner may not realize the maximum potential revenue for that event, because the patrons may have been willing to pay more, as evidenced by the existence of brokers and scalpers. Conversely, when the demand for an entertainment product is much lower, such as in the case of losing athletic teams, less popular acts, and the like, the tickets may be overpriced, resulting in lower attendance. By lowering the prices for the tickets, it is likely that more people will attend the event, resulting in more seats being filled. Even though the revenue per ticket may be lower in such a case, ancillary benefits arise from the ability to offer a fair value for lower-demand entertainment events. For instance, there is likely to be increased loyalty to the venue owner, or team, since the patron only paid the perceived value of the entertainment. In addition, increased sales from non-ticket revenue sources, such as parking, concessions, merchandise sales, and the like, will likely result from the increased attendance. These non-ticket sources of revenue are generally quite profitable, since the incremental cost necessary to accommodate increased attendance is relatively minimal.
In the conventional arrangement, one physical ticket, e.g., a paper ticket, is generated for each available seat at a venue, and each attendee is required to present a ticket to gain entrance to the venue. This requirement for physical possession of tickets places a restriction on the patron's ability to freely exchange tickets, particularly as the time of the event draws near. Typically, if a purchaser of a ticket is unable to attend the event, he or she may attempt to sell it or give it to an acquaintance, broker or scalper. In some cases, the purchaser may attempt to dispose of the ticket through an online auction site. However, this procedure has time constraints, since the seller must be able to physically deliver the ticket to the purchaser in time for it to be received prior to the event. Often, the purchaser is left with the option of simply forfeiting the cost of the ticket, or reselling it to a broker, usually at a substantial discount to its fair market value.